The American Medical Association (AMA) and the American Academy of Orthopaedic Surgeons (AAOS) are actively opposing CMS’s proposed changes in the physician payment formula. AMA made its position known in a comment letter it sent to the Centers for Medicare & Medicaid Services (CMS). Almost immediately after the AMA’s letter, AAOS followed suit with its own sharp critique of CMS’s proposal.
Both comment letters were drafted in response to a proposed rule issued by CMS last month: “Medicare and Medicaid Programs; CY 2024 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Advantage; Medicare and Medicaid Provider and Supplier Enrollment Policies; and Basic Health Program.” The proposed rule addresses a number of changes. Notably, changes to the physician fee schedule.
In the AMA’s letter, the physician society, largest in the United States, pointed at CMS’s “ongoing conversion factor reductions, specifically the proposed 3.36 percent reduction in the 2024 Medicare conversion factor (CF), with corresponding reductions in anesthesia CF rates.” It expressed concern about the potential implications of the proposed cuts for both physicians and patients. It pointed out that the proposed payment reductions are attributable to two factors: a 1.25% reduction from a temporary legislative update and a “negative budget neutrality adjustment linked to the introduction of an office visit add-on code.”
In an accompanying press release, AMA President Jesse M. Ehrenfeld, M.D., MPH said, “With higher costs for everything associated with practicing medicine, another year of Medicare payment cuts jeopardizes patient access and imperils the physician practices on which so many seniors rely.”
Dr. Ehrenfeld continued, “These cuts are unsustainable and unconscionable.”
AAOS President, Kevin Bozic, M.D., MBA, FAAOS said in his letter to CMS administrator Chiquita Brooks-LaSure, “Our ability to deliver high quality musculoskeletal care is hampered by inflationary pressures on practice expense.”
“By some estimates, the MPFS conversion factor would have been double the amount being currently proposed, had it kept up with inflation.” What makes these changes so disappointing is that, as Dr. Bozic wrote in his letter, “With inflation soaring to 40-year highs this year, on-going and scheduled statutory payment cuts, and many physician practices still dealing with pandemic-related financial and staffing issues, the current proposal from CMS undermines the long-term sustainability of physician practices while threatening patient access to physicians participating in Medicare.”
Both societies, AAOS and AMA, provided additional data to support their positions. From 2001 to 2023, said both societies, “the cost of operating a medical practice has surged by 47%, while physician payment rates have increased by only 9%. Additionally, when adjusted for inflation, “Medicare physician payment rates have plummeted by 26%.” This is “projected to worsen next year.”
Both letters also addressed other issues that will potentially affect physicians and group practices in the coming year. Notably, the AMA indicated the potential that “more physicians and group practices will be hit with a MIPS [Merit-based Incentive Payment System] penalty in 2024 based on the newly released 2022 performance period feedback.” The penalties have the potential, according to the AMA, to reduce Medicare payment by as much as 9%.
The comment letters are just one of many steps that both AAOS and AMA are taking to encourage Medicare physician payment reform.
For its part, at the Annual Meeting physicians, the AMA “called for a multipronged campaign to overhaul the outdated Medicare payment system, saying that patient access and survival of practices are at risk.” The AMA has also worked in conjunction with a number of other organizations to provide guidance for Medicare physician payment reform, entitled “Characteristics of a Rational Medicare Payment System.”
In its recent communication to CMS, AAOS’s President Kevin J. Bozic said, “we urge CMS to support a statutory fix that provides an annual inflationary update for physicians, akin to all other providers covered by the Medicare payment system. Orthopaedic surgeons have been at the forefront of the transition to value-based care, and we are eager to work together to improve upon existing value-based payment and delivery models in the Medicare program.”
